A Sydney man defrauded AU$1.2m (US$788,980) from investors after claiming that his sports betting system was foolproof and was guaranteed to generate big profits. [Image: Shutterstock.com]

Promising the sky

Many people have thought over the years that they created a foolproof way to beat the house, whether through casino games like blackjack or placing sports bets. One man in Sydney defrauded AU$1.2m (US$788,980) from 20 people who invested in his “Simply the Bets” wagering system.

believed his algorithm would help him beat sportsbooks

Michael Pryde believed his algorithm would help him beat sportsbooks when placing bets on basketball, baseball, golf, and horse racing. The 32-year-old guaranteed that his system was foolproof and would generate “big long-term profits.” Just like any scheme that sounds too good to be true, Pryde’s master plan ultimately fell apart.

The inevitable spiral

Pryde would place wagers and keep a 20% cut of any profits, which led to him earning about AU$320,000 (US$210,395) and giving back AU$2.4m (US$1.6m) to participants between August 2018 and January 2023 when the system initially worked.

It was when a losing streak began that he strayed from the plan and made more erratic decisions. That’s when he started hitting up family members and friends to get money to try to cover the losses of earlier clients.

Magistrate Scott Nash explained during the hearing in the Downing Centre Local Court that by taking this money, the defendant’s “motive was to try and repair, albeit deceptively and dishonestly, the damage to the business caused by the hemorrhaging losses.”

As the walls narrowed in on Pryde, he tried to buy himself some time to avoid bankruptcy by editing a bank statement to try to show that he had a bigger balance. His plan was to make enough money gambling to eventually recoup the losses.

No prison sentence

Pryde is facing the consequences for his actions, pleading guilty in March to a deception-related charge and admitting to trying to gain a financial advantage by using a false document.

Police found a note on Pryde’s phone from July 2022 in which he effectively admitted to running a Ponzi scheme by bringing on new clients as a way to recoup the money for existing ones. He acknowledged in the message that he was fully aware that he was engaging in both illegal and unethical behavior.

the defendant has shown remorse and a genuine willingness to repay the money

Magistrate Nash believes that the defendant has shown sufficient remorse and a genuine willingness to repay the money he took from victims. He avoided prison time as the magistrate believed that would harm his efforts to rehabilitate his gambling issues and hurt his efforts to reintegrate into society.

Pryde must complete 202 hours of community service and undergo mental health treatment for two years. The court also requires him to pay AU$100,000 (US$65,748) to the victims, the maximum allowable through the local court system.